Cablevision Disavows Dolan and Dish Offers No Aid

[Rick4464]

IMHO V* is no threat to the other rivals and never was. They had a chance to be a threat, but made poor decisions.

I believe everyone has a right to their opinion and I'm not defending anybody, but D* and E* both have a better customer base and more $$ to be able to offer better services now and in the future. V* had (maybe still does) a chance to take control of the market with HD, but by teaming up with Sears (bright idea), having not so great equipment (thanks Moto), using HQ install companies (I'll Never Say That Awful Lousy Lame Service that's Incorporated), and the lack of locals, they lost their chance of stealing those customers or even retaining some that have switched over to them.

I for one had V* after switching from D* and decided to go back to D*. Do I miss all of the the HD programming and high PQ? Of course I do (well not as much after hearing from some current V* complaints). But do I miss the pain in the a** of having to worry if I am going to lose service next week? Have to worry if the installers are coming out to fix an install situation or just "no-show"? Have to worry about if the recent S/W upgrade cause me to have to reboot all of my boxes again? Wonder when DVR is coming out (I was told early Mar. back in Feb)? HECK NO!!!

All companies start small and face challenges from larger companies that do more. But if the marketing were done properly, the cust service were there, and they offered more to begin with other than just HD, they may have had a better chance before being eaten up by the other sharks in the ocean.

Dolan does have a great idea with HD and he is ahead of his time in that aspect, but he's done most of his better changes to V* too late in the game. Had he released more channels a few months ago or even not let his sales/cs reps let customers know when the DVR will possibly be released or released it sooner, he may have happier customers and even more new customers.

You may call me a troll or whatever, but grow up and get over it!

 

[James Long]

There are over 200 million television watching homes in the United States.

110,420,000 households with 108.4 million TV households (2004 Nielson Media Research).

Of those, how many are satellite? Maybe 10%.

Actually about 25% are satellite. E* alone is in 10% of TV households (D* 13%, SkyAngel 0.9%, Voom 0.0004%).

Of that 10%, how many are HD homes? Probably 1%.

There is a $2,995 report on the net that will answer that question (% of satellite viewers with HD).

One free report (here) suggests 12.6 million total HD households by the end of 2004 with ONLY 4.6 million households actually receiving a HD signal via broadcast or pay TV.

JL

 

[philhu]

phil,

1. voOm is not a VIABLE entity, it is and has bled truck loads of money and is a drain on the parent companys stock
2 how do you know how much voon is worth?? a 400 million dollar price has been touted . cvc could probably write off that much in tax losses if it was shut down. it could also sell the rights to the planned sats "on order" to another company. it could sell off the content studios, which i am sure are worth a lot of cash. voom could be worth 2 times that 400 million figure if sold off to the highest bidders. that is what the board has to consider in a selling price, if it doesn't, the lawsuits and SEC defense costs alone could destroy cvc.....think ADELPHIA, and rigas thought he was above the stockholders, and he was also the biggest shareholder in that company. dolan sr is treading on VERY thin ice

1) VOOM is a viable business. The losses shown were inflated with 'charges'. I've said over and over. Directv lost $80-$100 million for the first 6 YEARS. Starting a sat business HAS to lose money to get a base. And they all go about it the wrong way, and fix it over time. I did not mean it was viable/money making now. I meant the concept is viable.

2) Adelphia - WRONG on all counts. Rigas TOOK stockholders money, thinking he was better than them. Dolan is NOT taking any stockholders money, at all. The amount he wants to pay HAS to be more than shutdown costs. Heck, the leases themselves are upwards of 300 million. Just taking those off Cblvison's hands is a huge fix.

 

[philhu]

Dolan does have a great idea with HD and he is ahead of his time in that aspect, but he's done most of his better changes to V* too late in the game. Had he released more channels a few months ago or even not let his sales/cs reps let customers know when the DVR will possibly be released or released it sooner, he may have happier customers and even more new customers.

N ow, I DO agree with this statement. THe DVR promises are wrong, and they should have let the subscribers know what was going on with channels, change of company direction, dvr realistic projections etc. It creates a family-type atmosphere, if you let your 'members' know a bit of the inside scoop, not just letting them hang like everyone else.

That is a problem they need to fix.

And GET RID OF INSTALLS OR LET PEOPLE DO SELF INSTALLS!! What a money waste! And bearer of bad reputation!

 

[gutter]

phil,

1. voOm is not a VIABLE entity, it is and has bled truck loads of money and is a drain on the parent companys stock

Strange thing is that the same was said about E* for its first 10 years and D* is still bleeding over a billion dollar loss last year. XM and Cirus were both called by Wallstreet big money drains. RCA was also considered a joke when it was founded by GE amost century ago. A company like VOOM has to loose money for at least 10 years. It was in their original business plan. The problem was that it was still tied to Cablevision that was lead by a man who would rather be a rockstar, Jimmy D.

 

[drod]

And GET RID OF INSTALLS OR LET PEOPLE DO SELF INSTALLS!! What a money waste! And bearer of bad reputation!

Thats rediculous, the only way V* can stay afloat is to market towards a greater target area. If we let people do self installations that would limit the number of new subscribers further. It would save money on techs/installations but that is a poor lack or forsight.

 

[will0471]

You can all supposition all you like about what is viable and what is not. Unless you've looked under VOOM's financial hood and "kicked the tires" so to speak, you are all entirely unqualified to judge what is "viable" or not.

Have any of you ever seen the actual start-up costs of VOOM? Do any you have any clue whatsoever of what the real shut-down costs are? (and when you consider those shutdown costs please include the golden parachutes that surely exist for the executives brought over from Cablevision Corporate in preparation for the initially proposed spin-off of VOOM, along with the national programming entities.

Do any of you have even the remotest idea of what the cost to launch Rainbow-1 was in the first place? Frankly, NEITHER Dolan's offer nor Echostar's offer even begin to cover THOSE expenses. Just to launch the satellite itself.. never mind what it costs on a quarterly basis to pay the millions of dollars in inventory, salaries, marketing and various other overhead costs.

So, again, you can all supposition all you like. The fact of the matter is is this: The whole VOOM situation has become nothing more than one big fat pissing contest between father and son, which you all as customers and the VOOM employees, as the ones who will suffer, in the end, if VOOM is not successful.

In watching all of this, do I believe that VOOM will survive? No... When even one of Mr. Dolan's handpicked new board members says the window of opportunity for VOOM is, if not closed entirely, a rapidly closing one.. and that he wouldn't invest his own money in the business, I think that says alot for what INDUSTRY experts (not just customers with no industry experience) believe about the viability of the product itself.

 

[dragon002]

gutter and phil,

thank you both for great posts, and for not flaming me, at least you guys are thinking

adelphia in not all ways resembles this, but in a lot of ways it does. "SUPER" voting shares, packing the board with friends and family and a lack of truly independent directors.

viable can be taken a lot of ways. lets say this yes i think directv did lose 80 to 100 million dollars last year, on paper! they are also blasting a billion dollars of sats into orbit and gaining 400.000 to 500.000 subs PER QUARTER, they will pass 15 million this year. that is a viable business. god they gain more new subs every 9 days that voom ever had, think about that.

a non viable business is one that lost 1.5 billion in 18 months is gaining maybe 4000 subs per month and whos churn rate is thru the roof. if they would have launched this thing with locals, i really think they would have 10 to 15 times the subs they have now and half the churn. the sat wouldn't have been sold and the board wouldn't be in chaos. they wouldn't have the problems with installers because of the ota debacle

thanks for replying

dragon

 

[ksload]

Echostar had losses through 2002 and only attained profitability in 2003. That's 7 years of losses. DirecTv has lost money every year since its inception in 1991. No venture is going to be profitable overnight, particularly one that is so investment based, not to mention the huge advertising requirements.

Should the plug have been pulled on Dish & DirecTv also?

 

[Jamey K]

Very nice post Dragon. Very nice.

 

[dragon002]

Very nice post Dragon. Very nice.

thank you jamey, god i LOVE that avatar!!!!

i guess im only half the a**hole that some think, guess ill try harder and make vicki really hate me!!! LMAO

if you need any more info on the ota problem, give me a yell

K. Rupert Mur.......i mean dragon

 

[James Long]

1) VOOM is a viable business. The losses shown were inflated with 'charges'.

So you believe that if expenses are placed on a credit card that they are not expenses? That's the kind of thinking that is getting people, and the nation, in trouble.

The 'charges' added to Rainbow1 last year were in part money that was spent to get Voom started in 2003 ... just part of doing business.

But even without the charges Voom spent $95 million for revenues of only $5 million in 4Q04 (and 4Q was a good quarter!). Of the all the 'operational' costs in 2004, only $98.5 million were spent on captial expenditures. $78.4 million was spent on capital expenditures in 2003 (with no revenue to report). That help to show how much of their operating budget goes to promotions and purchasing content. Expenses that cannot be cut.

To remain viable they have to get the revenue up to the point where it covers the expenses and then increase revenue to pay off the debts. I don't expect them to reach 'break even' in the first couple of years, but progress toward break even is needed. 3Q04 to 4Q04 actually showed a slight decline in revenue and a not so slight increase in operating costs (even without the 'charges'). They need to get the revenues up into the $20 million plus range (per quarter) to show that Voom is capable of making money.

Even with the ~40k reported customers this quarter (1Q05) I doubt if they will break $8 million in revenue. That would be improvement (just like 3Q04 was an improvement over the previous quarters). But will it be enough to declare Voom "viable"? That is entirely a matter of opinion - those emotionally tied to the loss of their satellite service are more likely to say $5 mil revenue would be enough but those responsible to shareholders have made it clear that Voom's performance is not good enough.

We just finished another quarter. Unfortunately it will take a while to get the quarterly figures out of Cablevision and by then other news will have eclipsed whatever is reported. But it will be an interesting quarter to look at.

JL

 

[will0471]

Thank you, JL, for saying much better what I was trying to! Yes, viability is relative to the different categories of people involved. Obviously, to the Cablevision board, VOOM is not viable, to the customers of VOOM, of course it is viable, they pay for and receive a service, so viability is obvious. If they customers got shut off tomorrow, then they wouldn't necessarily think of VOOM as "viable" anymore, now would they?

The long and the short of it is, that without Cablevision dollars, or Cablevision's willingness to allow Mr. Dolan to buy VOOM using someone else's dollars and maybe (???) not Mr. Dolan's net worth via Cablevision stock, VOOM is NOT a self-supporting entity. It can't pay it's employees on its own without another entity's (or investors) help, nor can it pay for its equipment.

In the case of E* and D*.. sure, they lost money as well, and one or both may still lose money. Heck, there are plenty of Fortune 100 companies that lose money, sometimes even several quarters in a row; HOWEVER, there is typically a strong business plan and/or industry guidance that would suggest a correction of a downward (or losing money) trend. When E* and D* started up, what was their competition? The world, so to speak, was their oyster. Growth was limited only to the number of people who could watch television. Either watch via cable or watch via satellite.

In the case of VOOM, it doesn't seem to be targeting SATELLITE customers, it seems to be targeting HD customers. The number of HD specific customers is NOT endless, in fact, it's just beginning and until prices come down to where the masses can afford to buy HD televisions, that growth market is always going to BE limited. If the target WERE specifically satellite subscribers, then VOOM would need enough of a draw to lure either existing satellite viewers away from E* or D* and/or to lure cable television viewers away from cable television. It would seem, based on the subscriber numbers, that VOOM has been fairly unsuccessful in either direction.

BTW, I don't mean my comments as folks who have VOOM shouldn't have or want VOOM or HD television. It's merely an interesting industry discussion of a company that is doing things (meaning CVC, and not just VOOM) that are hotly discussed in the industry right now, and particularly, I would imagine, in the Metropolitan New York area, where I am from. Barely a day goes by where one of the Dolans isn't on the cover of Newsday or in some article in the New York Times.. whether it is this issue, the proposed MTA Stadium, or now the possiblity of a bid for the Adelphia cable systems, CVC can't seem to stay out of the media spotlight. And that is, to go back to some other's comments about Adelphia, sorta how folks like Adelphia got bagged. Too much hinky business, way too publicly...

With Sarbannes-Oxley the latest financial buzzword, people have to be looking at the CVC situation and scratching their chins a bit and wondering where this is all leading?

 

[Lobstah]

Thats rediculous, the only way V* can stay afloat is to market towards a greater target area. If we let people do self installations that would limit the number of new subscribers further. It would save money on techs/installations but that is a poor lack or forsight.

How does this "limit the number of new subscribers further"? I just gives people the SAME option they have with OTHER sat providers. You can do it yourself, or you can hire someone...choice is yours.

Lob

 

[astrosfan]

Ok, let me make this very simple. The question of whether or not VOOM will survive, comes down to a very direct question. "Is there somebody(personal or cooperate)who believes that VOOM will make them money in their specific time frame. If the answer is yes VOOM will survive(though most certainly as a private, not public company), if the answer is no, VOOM will be shut down once Mr. Dolan accepts this view as fact.

Sadly our beliefs on this question don't mean squat. That being said I sincerely hope that somebody will swoop down and save VOOM, since it is hands down the best service out there IMHO.

Patrick

 

[dragon002]

guys,

my own opine, to narrow it down again:

1 voom has to stop behaving like an hd platform that happens to be delivered via satellite, to being a satellite company that specializes in hi def PACKAGES as a premium tier
2 this will at this point mean going private, and taking huge risks as an llp or llc.

just my opinion

dragon

 

[Nayl]

Strange thing is that the same was said about E* for its first 10 years and D* is still bleeding over a billion dollar loss last year. XM and Cirus were both called by Wallstreet big money drains. RCA was also considered a joke when it was founded by GE amost century ago. A company like VOOM has to loose money for at least 10 years. It was in their original business plan. The problem was that it was still tied to Cablevision that was lead by a man who would rather be a rockstar, Jimmy D.

Exactly do not think it could be said any better,dtv with all its subs and so called sucess still losing money and has ever single year it's been out.HDTV IS where t.v. is going .By fall/winter the price drops and rca units out will have a huge influx of new hdtv owners it will be a shame to think that ppl might have to go back to crappy E or D and there measly hdtv offerings.

 

[GreatMac]

Thank you, JL, for saying much better what I was trying to! .... When E* and D* started up, what was their competition? The world, so to speak, was their oyster. Growth was limited only to the number of people who could watch television....

Sorry to rain on the group hug here

I remember when Dish came in and there were similar dire predictions that there is no room for another sat service and Dish would either die or be acquired by the competition. When I signed up for Dish, DirecTV had about a dozen times more customers than Dish and gaining momentum much faster. I was advised at the time that I am wasting my $500 on Dish equipment, since they CANNOT survive.

Dish had no particular advantage over DirecTV, other than slightly less compression (and less channels), which is what brought me to them.

In the case of Voom, there is something much larger to differentiate them: HD and considerable and very good exclusive HD programming. It offers real choice, and a better choice. So this is one better than what Dish had almost a decade ago.

The market for HD is poised for rapid growth, with LCD sets of 30"+ dipping bellow the $1k mark at Target. Until 4-5 months ago nobody knew Voom existed. Their marketing has improved this a bit, but the vast majority of consumers are still unaware. If Voom can change this and gather momentum, I'd say they have a good chance of being successful. They really do offer better programming, better PQ and better choice. This is the reason why Voomers are much more fanatical than the rest: when is the last time you heard someone rave about their cable or Dish service ? But apart from just being cute, in the long run an army of proselytizing Voomers does translate into new recruits and does affect growth rates.

I do agree that Dolan needs to take Voom private and the sooner the better. Keeping my fingers crossed that things work out :up

 

[dragon002]

nayl,

you keep saying rca price drops this fall, rca price drops this fall, over and over voom doesn't have that much time to bargain with. don't you see what is happening?? dolan flying to denver to beg ergen to cancel the deal and ergen is not going to cancel squat. his interests lie with echostar as they should. the FCC will ok the deal for the sat, don't even think they wont, they have to protect 100 times the subs on ergens sat at 61.5 than protect a mere 46000 at that location for voom. and if dolan even thought the fcc would not ok the sale, he would not have been begging ergen for mercy.
i bet old rupert is sitting back laughing his a** off right now

sorry about being blunt

dragon

ps rca wasn't founded by ge, get the brain in gear before typing

 

[drod]

How does this "limit the number of new subscribers further"? I just gives people the SAME option they have with OTHER sat providers. You can do it yourself, or you can hire someone...choice is yours.

Lob

How many people like to have satellite tv that don't know how to install it? How many people get it just because satellite it is different? One of the good things about D* and E* when it comes to non technically inclined people is that it includes the installation, they don't have to worry about it. How many AV guys do we have that has V* that doesn't know how to install a dish? How many end users that have a major end TV that want something to actually put on it?

You have the ability to thereotically install your own with V* also. If you make the customer hire someone that leaves out the major people V* should be targeting, the people that are switching from another provider, the common user. You among others tend to forget this isn't the norm, everyone doesn't know how to install a dish.